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U.K. audit regulator rips quality at major firms

Audit regulators in the United Kingdom have taken off the gloves in their assessment of audit quality among the major firms, especially the Big 4.

The U.K. Financial Reporting Council issued inspection reports on all the major firms assailing them for a decline in audit quality and calling for swift, significant improvement to achieve regulatory targets. The report even singles out KPMG as turning out “an unacceptable deterioration in quality.”

Across the eight largest firms, including the Big 4, the FRC says its 2017-2018 inspection cycle identified 72 percent of inspected audits as requiring “no more than limited improvements,” which fell from 78 percent in the prior year. Among audits of larger companies, the top 350 companies listed on the Financial Times Stock Exchange, the FRC says only 73 percent required no more than limited improvements compared with 81 percent...

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